(Reuters) - Luxury groups discouraged by thickets of red tape and taxes are putting on ice ambitions to expand into India and Brazil and focusing instead on the Middle East, their No.2 priority after fast-growing China.
Gulf countries represent a tiny pool of buyers compared to India and Brazil but they offer low tariffs, a friendly business environment, retail space and solid appetite for Western upmarket products, luxury executives say.
In contrast, they complain of a shortage of retail infrastructure in India, and other bottlenecks that make it easier for wealthy travellers to buy luxury goods while flying through Dubai.
And Brazilians often prefer buying luxury watches and handbags in Florida, Paris or London to avoid paying several times more at home due to the high customs duties.
French luxury lobby group Comite Colbert, whose 75 members generate about a quarter of world luxury sales, said luxury companies struggled to enter both countries.
"For the moment, we consider India to be a market on stand-by," said Comite Colbert Chief Executive Elisabeth Ponsolle des Portes.
Custom duties are often more than 100 percent on luxury products in India and Brazil, and sometimes as high as 300 percent. In India, tariffs can change depending on which region the product is sold.
With regards to Brazil, duties depend on the customs officer's interpretation of the rules, Ponsolle des Portes said. Therefore, luxury groups are not hurrying to develop their business in the country and the Comite Colbert plans to wait until 2012 to help groups develop their presence there.
